Chartists can measure the market's risk tolerance by comparing the simple line charts for four ETFs. The S&P 500 ETF (SPY) and US Oil Fund (USO) rise when risk is "on", while the 20+ year Bond ETF (TLT) and US Dollar Fund (UUP) rise when risk is "off", Notice how the market moved from risk-off in September to risk on in October. SPY and USO bottomed and surged as TLT and UUP peaked and plunged.
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About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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